On May 12, 2026, 39 Bangladeshi commercial banks jointly launched the country's first institutionally governed venture capital platform — Bangladesh Startup Investment Company (BSIC) — with Tk 425 crore (~$35 million) in committed capital, unveiling its inaugural fund called Onkur Bangladesh Fund 1 at the Radisson Blu Water Garden Hotel in Dhaka. Though the government called it historic, the question remains whether a fund built by bankers, governed by bankers, and structured around banking logic can actually fix an ecosystem that collapsed because no one here was willing to take the risks that venture capital demands.
To understand why BSIC exists, we need to go through the domestic investment datasets of previous years. In 2024, total startup funding in Bangladesh saw a major drop of approximately 41% from the previous year — the lowest investment rate amongst the last six years. But the fact that is more striking is that the domestic investment rate saw a drop of 95%, to only $1.1 million, or roughly 2% of the total funding of that year. This means that for every $100 invested in Bangladesh, $98 came from abroad and only around $2 came from Bangladesh domestically. In 2025, there was no rebound either; by mid-year, local investors had deployed only $0.65 million across investments. The local startups didn't stop existing, but no one at home was willing to fund them. To understand the situation, we can look at the investment datasets from 2021 and before. In 2021, Bangladesh's startup ecosystem raised over $434 million across 94 deals — including a landmark $250 million investment in bKash by Japan's SoftBank, which holds the record of the single largest startup investment in the country. Since 2010, Bangladesh's startup deals have collectively raised $1 billion across 450+ deals, which produced the rise of startups like Pathao, ShopUp, Chaldal, and Shohoz. But since 2022, when foreign investors started pulling back, the domestic investment ecosystem — which had always been weak — started almost disappearing precisely when it was needed most. By 2024, deal counts had dropped from 95 to 41, which then dropped to only 12 deals in 2025. The scary fact is that most of the fund came from the $110 million merger-backed deal that created the SILQ Group, merging ShopUp and Saudi platform Sary. Excluding this deal, the total investment figure for 2025 amounts to almost nothing.
BSIC is an approach to solve this structural problem. While traditional bank loans require repayment with interest by a deadline, many early-stage startups most of the time fail to meet this deadline. BSIC solves this problem by taking an equity-based ownership stake, meaning the company will provide funds in exchange for a percentage of ownership and bears the risk of the startup being profitable or losing money. BSIC has initially launched with Tk 425 crore around in committed capital, with an authorised capital ceiling of Tk 20 billion, giving it room to grow. It is Bangladesh's first institutionally governed venture capital platform — meaning it operates with a formal investment committee with accountability to its shareholder banks, and professional governance structures.
The fund was created by taking 1% of profits from the shareholder banks from 2020 to 2024, and the banks will continue sharing their 1% profits every year, adding around Tk 200 crore to the fund annually. The size of each bank's contribution reflects its profitability: BRAC Bank holds the largest share at 7.71%, followed by City Bank at 6.74%, Dutch-Bangla Bank at 6.67%, Pubali Bank at 6.5%, Sonali Bank at 5.73%, Eastern Bank at 5.58%, and Prime Bank at 4.98%. Smaller banks have also contributed — NRBC Bank paid Tk 7.05 crore and SBAC Bank paid Tk 2.58 crore.
BSIC has explicitly stated that it will not fund ideas. It will only invest in startups that have already begun operations and can demonstrate early market traction and growth potential. Its target investment stages are seed, late-seed, and Series A — covering product development, business model refinement, and early scaling. Priority sectors include health, agriculture, education, transport, retail, and logistics. In exchange for capital, BSIC will take equity stakes using instruments including direct equity, SAFEs (Simple Agreements for Future Equity), and convertible notes. The fund's first three investments are planned by June 2026. However, BSIC has not yet appointed a Managing Director, Chief Investment Officer, or full Investment Committee.
BSIC's board includes nine members: five managing directors of shareholder banks and four independent directors. Mashrur Arefin, Chairman of the Association of Bankers Bangladesh and Managing Director of City Bank, will serve as BSIC's first Chairman. The other MDs are from Prime Bank, Mutual Trust Bank, Sonali Bank, and Pubali Bank. BSIC's board also includes Sami Ahmed — formerly a General Partner at B Capital, an international venture capital firm — as adviser to the board. Rahat Ahmed, founder of Anchorless Bangladesh, one of the country's few active local VC funds, is also serving as a consultant. At the launch event, representatives from 500 Global, Wavemaker Partners, ADB Ventures, Plug and Play, and several other international VC firms attended — a sign that BSIC is actively trying to position itself as a bridge to foreign co-investment. Bangladesh Bank has also begun discussions with the World Bank to provide additional grant-based support for entrepreneurs.
But there are some questions yet to be answered. In 2021, Bangladeshi startups raised over $434 million in a single year; a $35 million fund is a very thin amount in front of that. It's not even 10% of a single year's fundraising total. Besides, the executives are all from the banking sector. Traditional banking is not a risk-based industry — it provides loans with security and takes interest in return, while venture capital is a risk-heavy industry. As Shah Sufian, Principal Product Manager at Shikho and Co-founder of Shuttle, said to The Business Standard, "Of ten bets, eight may fail, but one or two can return the entire fund. If investors only back 'safe' plays, they'll miss the outliers that truly shift the curve." Whether a board dominated by commercial bank executives can genuinely operate the venture capital way remains an open question.
Despite these concerns, BSIC represents something that hasn't happened before in Bangladesh. It represents an institutional commitment by the government to direct domestic capital toward investment. Since 2010, local investors have contributed only around $76 million to startups in total — less than 7% of the $1 billion+ raised over that entire period. Bangladesh's startup investment ecosystem is heavily dependent on foreign VCs, which is why every global crisis affects us to an extreme degree despite having little to no direct connection with it. When foreign VCs started pulling back after 2021, there was no domestic ecosystem to survive that fall. BSIC is an attempt to solve this. As Finance Minister Amir Khosru Mahmud Chowdhury said at the launch, "there would be no political interference in investment decisions." Whether that assurance holds in the future will answer a great deal about the institution.
BSIC has the structure but no track record yet. The company still doesn't have a full investment committee. Whether the company will be able to maintain political goodwill and invest in companies without siding with partisan politics will dictate its future. The first three investments BSIC makes before the end of 2026 will say more about the institution than anything else — whether it is truly capable of taking the risks the VC world demands, or whether it will only look for safe options. And if it fails to bear the risk of losing money in the short run, it will eventually become an impressive institution that changes very little in the long run.